Spectrum Pharmaceuticals Reports Fourth Quarter 2018 and Full Year 2018 Financial Results and Pipeline Update
- Poziotinib enrollment completed in previously treated EGFR cohort (cohort 1) of ZENITH20 trial; topline results are expected in Q4 2019
-
ROLONTIS® (eflapegrastim) Biologics License Application
(BLA) was submitted to the
FDA -
Q4 Revenues were
$29.4 million , including$28.0 million in product sales; full year revenues were$109.3 million including$104.5 million in product sales
“2018 was a very productive year for Spectrum in which our two promising
pipeline products significantly progressed in clinical development,"
said Joe Turgeon, President and CEO of
Pipeline update:
Poziotinib, an irreversible tyrosine kinase inhibitor targeting EGFR and HER2 mutations:
- Enrollment in the EGFR, previously treated NSCLC cohort (cohort 1) in the ZENITH20 trial was completed; topline results are expected in Q4 2019.
- Enrollment in the HER2, previously treated NSCLC cohort (cohort 2) in the ZENITH20 trial is expected to be completed in Q4 2019.
- Initiation of pan-tumor and combination trials expected to be in H2 2019.
ROLONTIS (eflapegrastim), a novel long-acting GCSF:
-
Spectrum submitted the BLA with the
FDA in lateDecember 2018 . Due to the government shutdown, the file was officially received onJanuary 28, 2019 .
Pipeline update continued:
- Spectrum has begun launch readiness activities including inventory build and commercial preparedness.
-
Data from the Phase 3 study (RECOVER) was presented in a poster
session at the San Antonio Breast Cancer Symposium in
December 2018 . The RECOVER study was the second pivotal trial to meet all primary and secondary endpoints and demonstrated comparable safety and tolerability profiles to pegfilgrastim.
2019 Guidance
Assuming the previously announced divestiture transaction closes in March, we expect 2019 SG&A costs to decrease by approximately 30 percent relative to 2018. We expect 2019 R&D costs to increase nominally as reduced spending on the legacy assets is offset by the increased spending on pre-commercial supply and tech transfer activities for ROLONTIS and poziotinib. With the increase of cash from the sale of our commercial assets, we expect our cash balance to be sufficient to fund operations for at least three years.
Three-Month Period Ended
GAAP Results
Total product sales were
Spectrum recorded net loss of
The company ended the quarter with cash, cash equivalents and marketable
securities of
Non-GAAP Results
Spectrum recorded non-GAAP net loss of
Twelve-Month Period Ended
GAAP Results
Total product sales were
Product sales in 2018 included: FOLOTYN® (pralatrexate
injection) net sales of
Non-GAAP Results
Spectrum recorded non-GAAP net loss of
Conference Call
| Domestic: | (877) 837-3910, Conference ID# 2797623 | ||||
| International: | (973) 796-5077, Conference ID# 2797623 | ||||
This conference call will also be webcast. Listeners may access the
webcast, which will be available on the investor relations page
of
About Spectrum
Forward-looking statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of
© 2019
| SPECTRUM PHARMACEUTICALS, INC. | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
|
(In thousands, except per share amounts) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
|||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product sales, net | $ | 28,047 | $ | 27,942 | $ | 104,466 | $ | 116,178 | ||||||||
| License fees and service revenue | 1,356 | 627 | 4,867 | 12,189 | ||||||||||||
| Total revenues | $ | 29,403 | $ | 28,569 | $ | 109,333 | $ | 128,367 | ||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of sales (excludes amortization of intangible assets) | 6,865 | 11,241 | 26,756 | 42,859 | ||||||||||||
| Cost of service revenue | — | 138 | — | 4,359 | ||||||||||||
| Selling, general and administrative | 23,307 | 29,214 | 90,700 | 84,267 | ||||||||||||
| Research and development | 34,514 | 22,134 | 94,956 | 65,895 | ||||||||||||
| Amortization of intangible assets | 7,294 | 6,929 | 28,098 | 27,647 | ||||||||||||
| Total operating costs and expenses | 71,980 | 69,656 | 240,510 | 225,027 | ||||||||||||
| Loss from operations | (42,577 | ) | (41,087 | ) | (131,177 | ) | (96,660 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Interest income (expense), net | 143 | (602 | ) | (340 | ) | (6,798 | ) | |||||||||
| Change in fair value of contingent consideration related to acquisitions | 1,210 | (1,721 | ) | 1,927 | (4,957 | ) | ||||||||||
| Other (expense) income, net | (8,003 | ) | (512 | ) | 9,580 | 389 | ||||||||||
| Total other (expense) income | (6,650 | ) | (2,835 | ) | 11,167 | (11,366 | ) | |||||||||
| Loss before income taxes | (49,227 | ) | (43,922 | ) | (120,010 | ) | (108,026 | ) | ||||||||
| Benefit (provision) for income taxes | 7 | 15,366 | (1 | ) | 16,778 | |||||||||||
| Net loss | $ | (49,220 | ) | $ | (28,556 | ) | $ | (120,011 | ) | $ | (91,248 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ | (0.47 | ) | $ | (0.29 | ) | $ | (1.16 | ) | $ | (1.07 | ) | ||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic and diluted | 105,633,296 | 98,366,416 | 103,305,911 | 85,115,592 | ||||||||||||
| SPECTRUM PHARMACEUTICALS, INC. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
|
(In thousands, expect per share and par value amounts) |
||||||||
| December 31, | ||||||||
| 2018 | 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 157,480 | $ | 227,323 | ||||
| Marketable securities | 46,508 | 248 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $67 and $71, respectively | 29,873 | 32,260 | ||||||
| Other receivables | 3,698 | 2,133 | ||||||
| Inventories | 3,550 | 5,715 | ||||||
| Prepaid expenses and other assets | 9,579 | 10,067 | ||||||
| Total current assets | 250,688 | 277,746 | ||||||
| Property and equipment, net of accumulated depreciation | 385 | 589 | ||||||
| Intangible assets, net of accumulated amortization | 111,594 | 137,159 | ||||||
| Goodwill | 18,061 | 18,162 | ||||||
| Other assets | 10,158 | 53,783 | ||||||
| Total assets | $ | 390,886 | $ | 487,439 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and other accrued liabilities | $ | 69,460 | $ | 58,117 | ||||
| Accrued payroll and benefits | 9,853 | 9,261 | ||||||
| Contract liabilities | 4,850 | — | ||||||
| Deferred revenue | — | 3,872 | ||||||
| FOLOTYN development liability | 2,311 | 275 | ||||||
| Convertible senior notes | — | 38,224 | ||||||
| Total current liabilities | 86,474 | 109,749 | ||||||
| FOLOTYN development liability, less current portion | 9,686 | 12,111 | ||||||
| Deferred revenue, less current portion | — | 315 | ||||||
| Acquisition-related contingent obligations | 4,345 | 6,272 | ||||||
| Deferred tax liabilities | 1,469 | 1,438 | ||||||
| Other long-term liabilities | 5,650 | 6,215 | ||||||
| Total liabilities | 107,624 | 136,100 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | — | — | ||||||
| Common stock, $0.001 par value; 300,000,000 shares authorized; 110,525,141 and 100,742,735 issued and outstanding at December 31, 2018 and 2017, respectively | 110 | 100 | ||||||
| Additional paid-in capital | 886,740 | 837,347 | ||||||
| Accumulated other comprehensive (loss) income | (3,702 | ) | 15,999 | |||||
| Accumulated deficit | (599,886 | ) | (502,107 | ) | ||||
| Total stockholders’ equity | 283,262 | 351,339 | ||||||
| Total liabilities and stockholders’ equity | $ | 390,886 | $ | 487,439 | ||||
Non-GAAP Financial Measures
In this press release, Spectrum reports certain historical results that have not been prepared in accordance with generally accepted accounting principles (GAAP), including non-GAAP product sales, net and license fees and service revenue, non-GAAP selling, general and administrative expenses, non-GAAP research and development expenses, non-GAAP net loss and non-GAAP net loss per share. Non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measures in the tables of this press release and the accompanying footnotes. The non-GAAP financial measures contained herein are a supplement to the corresponding financial measures prepared in accordance with GAAP. The non-GAAP financial measures presented exclude the items summarized in the below table.
Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results and that these items are not indicative of the company's on-going core operating performance. Management uses non-GAAP net income (loss) in its evaluation of the company's core after-tax results of operations and trends between fiscal periods and believes that these measures are important components of its internal performance measurement process. Management believes that these non-GAAP financial measures are useful to investors in providing greater transparency to the information used by management in its operational decision-making. Management believes that the use of these non-GAAP financial measures also facilitates a comparison of the Company’s underlying operating performance with that of other companies in its industry, which use similar non-GAAP measures to supplement their GAAP results.
The non-GAAP financial measures presented herein have certain limitations in that they do not reflect all of the costs associated with the operations of the company's business as determined in accordance with GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. In addition, other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative tool. Investors and potential investors are encouraged to review the reconciliation of our non-GAAP financial measures contained within this news release with our GAAP financial results.
| SPECTRUM PHARMACEUTICALS, INC. | |||||||||||||||||||
| Reconciliation of Non-GAAP Adjustments for Condensed Consolidated Statements of Operations | |||||||||||||||||||
|
(In thousands, expect per share amounts) |
|||||||||||||||||||
| Three Months Ended December 31, |
Twelve Months Ended December 31, |
||||||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
| (1 | ) | GAAP product sales, net & license fees and service revenue | $ | 29,403 | $ | 28,569 | $ | 109,333 | $ | 128,367 | |||||||||
| Non-GAAP adjustments to product sales, net & license fees and service revenue: | (999 | ) | — | (3,000 | ) | (5,000 | ) | ||||||||||||
| Non-GAAP product sales, net & license fees and service revenue | $ | 28,404 | $ | 28,569 | $ | 106,333 | $ | 123,367 | |||||||||||
| (2 | ) | GAAP selling, general and administrative expenses | $ | 23,307 | $ | 29,214 | $ | 90,700 | $ | 84,267 | |||||||||
| Non-GAAP adjustments to SG&A: | |||||||||||||||||||
| Stock-based compensation | (3,337 | ) | (2,997 | ) | (14,010 | ) | (11,521 | ) | |||||||||||
| Depreciation expense | (22 | ) | (76 | ) | (213 | ) | (316 | ) | |||||||||||
| Severance and legal expenses | — | (7,080 | ) | — | (7,080 | ) | |||||||||||||
| Non-GAAP selling, general and administrative | $ | 19,948 | $ | 19,061 | $ | 76,477 | $ | 65,350 | |||||||||||
| (3 | ) | GAAP research and development | $ | 34,514 | $ | 22,134 | $ | 94,956 | $ | 65,895 | |||||||||
| Non-GAAP adjustments to R&D: | |||||||||||||||||||
| Stock-based compensation | (949 | ) | (557 | ) | (3,473 | ) | (2,235 | ) | |||||||||||
| Depreciation expense | (2 | ) | (2 | ) | (9 | ) | (9 | ) | |||||||||||
| Other R&D milestone payments | — | (250 | ) | (500 | ) | (250 | ) | ||||||||||||
| Non-GAAP research and development | $ | 33,563 | $ | 21,325 | $ | 90,974 | $ | 63,401 | |||||||||||
| (4 | ) | GAAP net loss | $ | (49,220 | ) | $ | (28,556 | ) | $ | (120,011 | ) | $ | (91,248 | ) | |||||
| Non-GAAP adjustments to net loss: | |||||||||||||||||||
| Adjustments to product sales, net & license fees and service revenue, SG&A, and R&D as noted above | 3,311 | 10,962 | 15,205 | 16,411 | |||||||||||||||
| Adjustment to cost of sales | 22 | — | 89 | 1,000 | |||||||||||||||
| Amortization of intangible assets | 7,294 | 6,929 | 28,098 | 27,647 | |||||||||||||||
| Adjustments to other (expense) income | 6,454 | 3,258 | (10,168 | ) | 10,914 | ||||||||||||||
| Adjustments to (benefit) provision for income taxes | (7 | ) | (15,366 | ) | 1 | (16,778 | ) | ||||||||||||
| Non-GAAP net loss | $ | (32,146 | ) | $ | (22,773 | ) | $ | (86,786 | ) | $ | (52,054 | ) | |||||||
| (5 | ) | GAAP loss per share (Basic and Diluted) | $ | (0.47 | ) | $ | (0.29 | ) | $ | (1.16 | ) | $ | (1.07 | ) | |||||
| Non-GAAP loss per share (Basic and Diluted) | $ | (0.30 | ) | $ | (0.23 | ) | $ | (0.84 | ) | $ | (0.61 | ) | |||||||
| Weighted average shares outstanding: | |||||||||||||||||||
| Basic and Diluted | 105,633,296 | 98,366,416 | 103,305,911 | 85,115,592 | |||||||||||||||
(1) Non-GAAP product sales, net and license fees and service revenue: These amounts reflect adjustments to reverse revenue recognition for upfront revenue from out-licenses and revenue from milestone achievement(s) that do not consistently recur. The resulting non-GAAP revenue solely consists of our (i) product sales, (ii) percentage-based royalties from our licensees’ sales, and (iii) service revenue. We believe this measure of non-GAAP revenue is more indicative of the period-over-period success of our core ongoing product sales and service revenue.
(2) Non-GAAP selling, general and administrative expenses: These amounts reflect adjustments to reverse allocated operating expenses for certain non-cash items (including stock-based compensation and depreciation), as well as the reversal of irregular operating expense items such as non-recurring legal fees, settlements and severance. We believe the resulting non-GAAP SG&A value is more indicative of the period-over-period success of our administrative expense control, and more reflective of our normalized SG&A expense trends. We believe the resulting non-GAAP SG&A value is more indicative of the period-over-period success of our administrative expense control, and more reflective of our normalized SG&A expense trends.
(3) Non-GAAP research and development expenses: These amounts reflect adjustments to reverse allocated operating expenses for certain non-cash items (including stock-based compensation and depreciation), as well as non-recurring R&D milestone achievements that we record to expense for our in-licenses. We believe the resulting non-GAAP R&D value is more reflective of our true R&D expense trends.
(4) Non-GAAP net loss: These amounts reflect all non-GAAP adjustments described in (1) through (3) above, plus other non-cash and/or non-recurring items, including: (i) adjustments to reverse royalty expense on receipts from regulatory and sales milestone achievements; (ii) adjustments to reverse operating expenses for non-cash amortization and impairment of intangible assets (the reversal of these non-cash expenses allows for a clearer representation of the period-over-period success of our overall financial results and future working capital requirements); (iii) adjustments to reverse the impact of income taxes; (iv) adjustments to reverse the impact of mark-to-market contingent consideration (although our contingent consideration results from prior acquisitions and is a part of our business strategy, these adjustments through earnings typically result from variables other than our current commercial activity or other operating performance measures that are a focus of our management); (v) reversal of foreign exchange gains and losses (non-cash); (vi) reversal of debt discount accretion expense (non-cash) for our convertible notes; and (vii) reversal of the mark-to-market adjustment on our equity securities.
(5) Non-GAAP net loss per share: These amounts reflect all non-GAAP adjustments in (1) through (4) above to present our overall non-GAAP financial results for each period on a per-share basis.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190228005917/en/
Source:
COMPANY CONTACTS
Shiv Kapoor
Vice President, Strategic
Planning & Investor Relations
702-835-6300
InvestorRelations@sppirx.com